Break-even ACoS and Target ACoS

Subtract product cost, fulfillment, marketplace and payment fees, expected returns, and other variable seller costs from the attributed sales basis. Divide the remaining contribution by that same sales basis.

Break-even ACoS % = contribution before ads / attributed sales

Target ACoS % = (contribution before ads - retained profit) / attributed sales

ROAS is the reciprocal: a 25% target ACoS equals 4.00x target ROAS.

This illustrative product has a $60 attributed sales value, $18 landed product cost, $8 fulfillment cost, $4 other variable cost, and percentage marketplace fees equal to 15% of sales.

Break-even ACoS is 35%, equivalent to 2.86x ROAS. Reserving $6 profit leaves $15 for ads, so target ACoS is 25% and target ROAS is 4.00x.

• Use actual net attributed sales on the same basis as the cost model.
• Include landed product cost rather than product purchase price alone.
• Use the applicable referral, fulfillment, closing, storage, handling, or other variable fees from current seller records.
• Estimate return and refund loss from a mature product cohort.
• Separate costs that change with each sale from fixed subscription or overhead allocations.
• Recalculate when price, fee schedule, product dimensions, or fulfillment method changes.

Example limit: The 15% fee in the scenario is an input, not a universal Amazon fee or category benchmark.

Amazon Ads defines ACoS as ad spend divided by ad revenue and ROAS as ad revenue divided by ad spend. The seller cost boundary and retained-profit target above are ROAS Break modeling choices.

• Amazon Ads ACoS guideACoS definition, formula, and interpretation. Checked August 20, 2026.
• Amazon Ads ROAS guideROAS definition and relationship with ACoS. Checked August 20, 2026.